Why Football Needs To Embrace More Businessmen

I'd probably join most choruses of regret that football has become a more commercialised business compared to its days as a weekend leisure activity primarily for the working classes. Back when you could pay at the turnstile on the day and half time or pre-match dining depended on how far the Percy Dalton's peanuts vendor could throw a bag of them. Assuming all the coins you passed along the ranks in front of you didn't end up in someone else's pocket before reaching him! Not something that you could always have total confidence in.

It's tempting to think that football worked better when it appeared to be less commercial than it is now but that's to ignore stories of top flight football managers receiving brown envelopes in motorway stations as practised by a certain Spurs executive while his chairman, businessman Lord Sugar, tried to prise the lid off the murkier side of football's halcyon days. Not unique tales either as it pre-dated Arsenal's own brush with the games under-the-counter culture by a couple of years as George Graham parted company with the club in the wake of our own bung scandal. Since those early times of more modest but growing broadcasting and commercial revenues, football has tried to walk the long line between working man's club and multi-million pound commercial enterprises without fully reconciling what it must be. Football had defeated Sugar by 2001 when he sold the majority of his shares describing the football experience as a waste of his life. In the meantime pet dogs with their own bank accounts in Monaco continued to demonstrate practices which might appeal to used car spivs weren't lost to the game.

Sugar's struggles to introduce a business culture to that of football were mirrored by the extent to which support was visibly greater for Venables as they fought their battles in courts of law. Despite the problems Venable's more obvious misdeeds had brought to his club's operations. This same belief among many supporters that football is unique enough to operate outside standards most would insist apply in most other spheres has allowed the corrosive effect of the takeover of some clubs for political rather than sporting or commercial reasons. Buying the hearts of supporters 'ardent for some desperate glory' knowing their minds would follow, oligarchs and sovereign states associated themselves with highly visible culturally powerful icons in the shape of European football clubs like Chelsea, City and PSG in order to seek political protection, gain or influence. Given the oxygen of global broadcasting and its associated commercial appeal, instead of the earlier nudge and a wink, you scratch my back, there's a drink in it for you, godfather model of football being replaced by a business culture seeking to manage and develop commercial assets for purely commercial reasons it had instead succumbed to political takeover aided and abetted by supporters unconcerned where their trophies came from.

It's no surprise supporters are driven by emotions as it's what makes us supporters, nor that many are justifiably cynical about the motivations of big businessmen, but given the way football has sometimes been misused in the past it seems time to accept properly regulated business practices will give us a better chance to enjoy football as a sporting competition. The advantage of a genuine business culture is it generally accepts regulation with transparent operating standards and is obliged to open itself to regular scrutiny. Football has resisted much of this claiming that its circumstances are special and should be allowed to continue to operate in its own bubble.

The reality of football is broadcasting and commercial revenues are outstripping match day revenues and diluting influence at the turnstiles. Like it or not this won't be reversed any time soon but the commercial pull is in the same direction, and may be greater, as for those seeking the triumph of a trophy. Commercial success depends on sporting success if the 'brand' is to have value. A point Kroenke was keen to make at the last AGM saying:

"We have come a long way, with the debt being paid down, commercial revenues are increasing.

"We have more coming and are confident. However, nothing works unless we have success on the pitch."

If in order for the business to be successful the team has to be successful that's stronger motivation than any purely passion led desire for silverware. A chicken and egg conundrum for some but to be a successful football club in the modern game it is ever more essential to be a successful business. That's no bad thing and stands the best chance of giving supporters enduring achievement and repeat success.

In a speech to Sports Journalism students Wenger claimed we had become a more emotional and less rational society. It's that emotional tendency driving resistance to healthy pragmatic commercial practice in favour of the romantic speculative wheeler dealer. To some extent football supporters see this passionate aspect as more uniquely important to football yet others are no less passionate about their interests in such as music, theatre, cinema or politics if less demonstrative about their passion. Still the concern is the corporate grey suits and orchestrated excitement may drain some of that passion from the game. The irony is many already willingly participate as in the transfer deadline clock conducting supporter choirs to their frenzied crescendo twice each season.

Do supporters have anything to fear if grey suited corporate businessmen run their clubs as opposed to 'football people'? While cynicism is healthy, corporate business standards and performance are easier to judge and measure than much of what has been seen in the past. Viewed through the eyes of successful US sporting businessmen European football practices, the transfer market notably, look archaic and skewed. As Jerome De Bontin, general manager of MSL's NY Red Bulls and former Monaco executive put it 'I came from the financial world, and it [european football transfers] is the opposite of that. There is no transparency, no regulation. In many ways, it is a totally irrational market.'

The Glazers have been condemned by United supporters for mortgaging assets the club already had to fund the its acquisition but their financial performance since then has been strong with debt brought to manageable levels and good cash reserves following strong revenue growth particularly in commercial development. It's not too difficult to see what the Glazers are bringing in and what they are taking out and their listing on financial exchanges demands a need to conform to financial best practice. It hasn't always been as transparent at other clubs in the recent past.

The introduction of FFP is driven by acceptance football must behave more professionally with more of its revenues going into profits to be invested in the game providing better stadia and stadium facilities for supporters, academy development and coaching for aspiring players along with competitive squads. It also makes sense for clubs, as brand reinforcement, to respect and support their community heritage to benefit that community on an ongoing basis. It needn't be of concern that part of those profits go into the pockets of business investors if they are visible and proportionate to revenue and profit growth. The ManU shareholders were drawing dividends without sacrificing success long before the Glazers came along.

Enchanting as Highbury's charms were, filled with nostalgic memories, the new stadium is a big improvement in what it offers more supporters. Just as in the main we get better cars, houses, technology, pharmaceuticals and most other products and services when those investing in and managing the businesses can do so successfully and profitably so should the whole football 'experience', if that isn't too crass a term, be better. A more level operating environment for those businesses and greater, fairer competition between them might make trophies no less difficult to gain but could lead to less dominance and a wider distribution of trophy opportunities.

From philanthropists, spivs, oligarchs and sovereign states we may now be reaching a time when the dominant culture in football is genuine commerce. With all the scepticism that goes along with businessmen at the helm, and whatever our regrets about commercialisation, it's better for supporters to embrace and encourage a regulated business culture hence the best and most professional businessmen are those we should want to see running our football clubs. If the culture is strong enough it may eventually even oblige FIFA to adopt loftier standards.

Comments

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I guess the big anxiety I'd have is how far FFP encourages intense revenue driving from supporters. Even though the turnstiles are becoming less important to a club's income now, the pressure on the wallets of those coming through the turnstile is bigger than ever. I suppose it's ironic in retrospect that when Sky waded in, people predicted tickets would be given away for free because TV coverage would stop people wanting to go! But you're probably right in that we're too far down that road now to turn back.

Sadly the writing was on the wall as far back as the North Bank Bond Scheme. What was it Dein said? 'The club is not run as a charitable institution'. The hope has to be that good businessmen should realise they do need to keep visible and enthusiastic support. That may mean, in fact is happening already, that some people can afford only to go to the less popular games. On the other side of the coin they have to make games worth going to. There's much to regret about the way the game has gone but some to welcome as well.

There can't be that much more revenue generation from supporters we currently have, it's simple economics even given the additional tolerance level you get with supporting someone you have no choice over (which makes football unique compared to the opera etc). I suppose the ones they'll want are the fans, ones that don't have any ties with the club but choose to adopt the whole "experience", but there again, it'd be at the expense of loyalty, but then that clearly has a price. You're not getting kids coming through and going over the football (Arsenal, Utd at least), the ones that are are usually bored after 10 minutes cos there's no new naughty words to hear and brag about on the playground after, it's just that Daddy's forked out £60 for your cushioned seat. Anything with this amount of money to be made is obviously going to be run by businessmen, it's just not right it's at the expense of football.

Barca's ticket pricing model is basically to supply reasonably priced tickets to their regulars and members and to charge 'tourists' who are only going to go once or once a year at the most more money. I went to the Libertadores final in Brazil last year and paid well over the odds on the basis that it was a novelty and a bit of a one off, so I was more inclined to do it. Especially because I was ostensibly on holiday anyway. I think it's quite an interesting model but one that's not really used over here.

The football itself has probably benefited from the money poured into the game. Stadiums are better and facilities at those stadiums are better. Players are better looked after and more money is invested in training them to play better and run faster for longer - and getting them fitter - and the rewards should encourage more of them to do so. There's little that's gone on at the expense of football. Most of the faults are a failure of footballing authorities to adapt quickly and firmly enough to the changes in the game. Demand for it has grown partly as a consequence of its growth as a spectacle and the 24/7 promotion of all aspects of the game. Good businessmen will always look for ways to invest in their future client base - and to incentivise and reward loyal customers - it's just good business to do so. The need is to attract those businessmen who see their market in that way and/or to encourage those who don't to do so.

I think the notion that there's no choice over the support or the extent of the support given to a particular football team doesn't hold as true as it might have done. The geographic ties are less dominant than they were when most clubs were just local teams. The growth of the PL as a global spectacle has seen to that. Family ties might exist for many but they tend to fade over time if there aren't other ties. There's mistaken belief that only supporters are loyal but for the majority of supporters loyalty is as conditional as it is for many others associated with a football club. Arsenal manage to fill the Emirates with 60,000 for virtually every game - but how many would turn up if we were playing in the conference? A good business has to obtain and sustain the resources to make sure it can provide enough incentive for those to turn up. Simply chasing rainbows won't do it.

The economic history of the professional leagues in the US perhaps offers an excellent case study to buttress the theses and points made in the article. Although conditions are not the same, the early business model pursued in the US is very similar to the current European model. Ownership driven by ego maximization (of the rich) eventually collided with the profit maximization sentiment when it became possible to reach millions in their living rooms. Fans who attended games appeared to be drained dry during the transitional period to the profit maximization phase. In reality though this is really a false dichotomy. What changed really was the economic base of those who attended and are attending games these days. You have to be at the center-to-upper end of the middle class to be able to afford going on consistent basis. For those below it becomes a sort of 'ration-driven' situation as it has always been in relative sense. Put differently, for the majority of supporters, going to games have always been an expensive consumption tax whether the timeline is in the 19th, 20th, or 21st century. I do agree that creative ways must be devised to attract and broaden the economic base of those who attend games these days. But this must also come as a strategic business innovation that creatively 'destroys' the emerging trend of spending a fortune just to watch a single game.

That's one of the more interesting backgrounds and pointers to how the game might develop - at least in the EPL. There have been different investors in European football for very different reasons over the last 10 to 15 years some of which I tried to touch on in the article. The more interesting is the investment. almost exclusively in the UK, from American sports investors. Including Arsenal of course. These are the people more likely bring a genuine business culture but one that should be shaped with more 'customer' awareness. Not that all have been successful as Hicks and Gillette demonstrated but ultimately that has to be the best motivation for the average supporter.